ombudsman news

issue 125

May/June 2015

ombudsman focus: moving with the times

In the fifteen years since we were set up, we’ve had hundreds of thousands of conversations with businesses and consumers - focused on resolving problems fairly and informally, whatever the financial product or service involved.

That hasn’t changed - but “complaining to the ombudsman” looks and feels very different to how it did in 2000. In this ombudsman focus, Garry Wilkinson, principal ombudsman and director of new services, explains why.

so Garry, what’s changed for the ombudsman?

I think it’s true to say that while our approach to complaints has stayed rooted in fairness, the world around has never stopped changing. And PPI changed things pretty dramatically for us.

To deal with complaints in volumes we’d never seen before - not even with bank charges or mortgage endowments - we had to scale up our operations and work very differently. We settled many similar complaints at the same time - working with businesses to identify customers whose circumstances were broadly the same.

The world kept moving beyond PPI, too. More generally - looking outside financial services at the bigger picture - I’d say the demand is for greater tailoring of customer service to individual lifestyles and preferences. Financial businesses have responded to that in the ways they deliver their own services - moving from branch banking to phone and online, and again to social media and apps.

We were set up fifteen years ago to resolve complaints quickly and informally. But it’s clear that today - at a time when people can get a loan within hours, or find the answers they need from online communities - “quick” and “informal” mean very different things.

As Caroline writes in her foreword - and as we’ve said in previous issues of ombudsman news - we need to take these changes seriously. For us, it isn’t a question of appealing to particular “segments” of customers we want to “target” or “attract”. As a service for everyone in the UK, keeping pace with people’s changing needs and expectations is a key responsibility of ours. It’s about reaching people when they need us - and in a way that fits in with modern lives.

and what does “modern” look like for the ombudsman?

Well, over the past few years, we’ve invested a lot of time and effort in ensuring our ways of working are fit for the future. We’ve come a long way from filing cabinets and fax machines, and we’re probably further towards the cutting edge than you might expect.

Bear in mind that the year 2000, when we were set up, was round about the time many people were first getting personal email accounts. And for many years, people have been able to download a complaint form off our website, and then either post or email it back to us - whatever’s been most convenient for them.

We know some people feel there’s no substitute for a conversation - hearing someone’s voice. And hundreds of thousands of consumers continue to phone our helpline. But from last year, it’s been even easier for people who feel comfortable doing things online to get in touch with us. They can now tell us what’s happened directly through our website - without needing to download a separate form.

And we’ll soon be launching a tool for contacting us on the go - so people can give us the gist of their problem and we can get back to them in a way and at a time that suits them.

no “virtual ombudsman”…?

Not quite. On a few websites I’ve visited, though, I’ve been asked whether I want to talk to someone on the customer service team using an instant messaging service, rather than over the phone. There was no reason why that couldn’t work for us - and after testing it out last year, since January we’ve been offering webchat as another way of contacting us.

We know from people’s feedback that they’ve really appreciated being able to talk to us in a quick, discreet way - and from our perspective, it can sometimes be even more effective in getting to the heart of what’s happened. As we mentioned in our annual review, which we published in May, over the last year we sorted out one in five complaints about payday loans completely through webchat.

how do the new EU rules about complaints fit in to all this?

Basically, the EU recognises the value of quick, informal “alternative dispute resolution” - ADR - for businesses and their customers. And so an EU directive is coming into force to make sure an ADR scheme is available in every sector across Europe. The regulations that bring the directive into UK law will apply from 9 July.

The ADR directive says ADR providers - like us - should aim to give an answer about a complaint within 90 days of receiving all the information we need to look into it. And by continuing to work flexibly and quickly, we’ll do what’s expected of us.

ADR’s nothing new for us - it’s been our day job for the last 15 years. And even before our single ombudsman scheme was set up, different financial services sectors had their own out-of-court schemes. So in the UK, we’ve been resolving complaints about financial services fairly and informally for 35 years.

what do these changes mean for businesses?

Successful businesses have always had to change to respond to their customers’ needs - and they know that speed and personalisation are important. Unfortunately, I think things can still fall down when something goes wrong. It’s not necessarily the business’s fault - but when there’s a complaint, it can get a whole lot more formal, with customers suddenly faced with procedures and investigations that can last months.

Over the last few years, we’ve identified lots of different areas where “traditional” processes don’t fit the bill - and businesses have been as keen as us to do things differently. When some banks had IT problems, for example, we worked together - mainly over the phone - to sort things out as soon as possible for customers who, in some cases, couldn’t access the money they needed for essentials.

So the fact we’re testing and developing new ways of working shouldn’t come as a surprise to businesses. It’s something we’ve always done - and with the overwhelming support of the businesses involved.

To give an idea of what the future looks like in practice - over the past few months, we’ve been asking businesses to share information with us more quickly. A key part of this has been moving away from rigid timescales - and instead looking at what’s reasonable given the circumstances of the problem and the nature of what we’re asking for.

For example, “standard” 14 or 21-day timescales to get information to us generally aren’t necessary - and aren’t easy to justify at a time when technology has raised expectations about the speed of communication.

We’ll also be giving our answer to the business and their customer at the same time - letting everyone know what we think. We’ve been clear with businesses that if we don’t get the information we need - without good reason - it’s only fair on their customers that we move ahead without it.

We’ve been really encouraged by the enthusiasm of businesses we’ve been working differently with so far - and how many others have been asking to get involved. We’re working increasingly flexibly across all sorts of areas. People handling complaints at businesses might have already experienced this first hand - or they will do very soon.

So businesses will need to ensure that they’ve got the right processes in place to support giving their customers answers more quickly - and this may sometimes be challenging. They’ll need to make sure that their people on the front-line have the confidence and the authority to move complaints forward in a fair, pragmatic way.

it is working?

So far, where we’ve been working differently, we’ve been giving people an answer to their complaint in around three weeks - which is clearly far quicker than the 90 days I mentioned earlier. And eight in ten consumers we’ve answered - including those whose complaints weren’t actually upheld - have said they’re satisfied with their experience.

But that’s hardly surprising. Thinking about the worry, lost time and financial impact of something going wrong, it’s clear that getting a rapid answer can make a real difference - whether you’re having problems with a payday lender, worried about a missing money transfer, or waiting to hear about a medical insurance claim.

This positive feedback isn’t only good for the ombudsman - it also reflects well on the business involved. One complaints handler described to us how their customer was “over the moon” at things being put right so quickly.

For people who are motivated by problem-solving and excellent customer service - and there are thousands of them on the front-line here and at businesses - bureaucracy can be really frustrating. “Behind the scenes” things - like process-driven stages of complaints - shouldn’t get in the way of putting something right sooner rather than later. It’s great to hear businesses saying they appreciate the flexibility of working together with us at an early stage - without being constrained by inflexible, box-ticking procedure.

And getting down to the commercials - if a strong business case is really needed, there is one. Looking at how resources are spent, applying initiative and pragmatism right at the front-line means fewer dragged-out, costly disputes in the long run. In many cases, sorting out a problem quickly once it’s been escalated to us means a business will keep a customer they may otherwise have lost.

so what’s next?

As I said earlier, change isn’t something that ever ends for us. We’ll continue to review how we work - talking to consumers and businesses about what they need and expect from us.

Looking to the next steps, we’ll soon be introducing text message updates. While texting has been around for years - and hearing from friends and family this way is just normal - people told us they’d also value the option of hearing from us on the go.

We’re also working on an online portal, which will allow businesses and consumers to check in on their complaints with us whenever it suits them.

It’s understandable that some businesses might be nervous about what some of the things I’ve mentioned could mean for them day-to-day. Our adjudicators will be able to talk through any questions a business have about a particular complaint.

Or - as usual - if a business is dealing with a problem that hasn’t yet reached us, our technical advice desk will be able to give a practical answer on 0207 964 1400 or at technical.advice@financial-ombudsman.org.uk.